VJ Kurian & the CIAL Saga
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Transcript of VJ Kurian & the CIAL Saga
Cochin International airport limited
Sruthi.G(T21097)
Madhulatha.B(T21098)
Rama Naidu(T21099)
Sravan Kumar(21100)
Gaurav Wankhde(T21101)
• Cochin International Airport (CIAL) is the first Greenfield airport setup in the public private partnership (PPP) model in civil aviation infrastructure sector in India.
• Cochin International Airport is an international airport serving the city of Kochi and its neighboring districts. The airport is located in Nedumbassery, in the state of Kerala, India.
• It is the busiest and largest airport in the state of Kerala. For the financial year 2012-13.
• it was the fourth busiest airport in India in terms of international passenger traffic.
The case is a solid material for motivating young minds in India against corruption
The case study is Sponsored by BASF INDIA LTD. This is a story of a civil servant fought against odds. It is a rare success story of PPP model in India at
time(1999) This is a story of The man was full of ideas, often
totally novel, and he knew how to implement them through team work and with the confidence of everyone in the organization
The case narrates the success of strong determination, persistence, leadership, financial discipline and the ability to operationalize ideas and plans under difficult conditions and under the shadow of vested political interests
• The Day of Joy for CIAL 2004 august31, CIAL crossed Breakeven and starts earning Profits
LOCATION ADVANTAGES
The Cochin International Airport is strategically located with easy access to all three National Highways passing through Kerala (NH 47, NH 17 and NH 49) and is only half-an-hour drive away from the city.
The main Railway line from Kanyakumari to Delhi is adjacent to the airport and it is situated between Alwaye and Angamaly Railway Stations.
The Cochin Sea Port, one of the biggest in the country is also situated close by.
Profitable phase
• Operating profit is reasonable ever since its operations in 1999• Soon after Kurian return in 2003 as MD they
have completely gone for restructuring the entire debt• But due to huge interest burden its not able to
make profits until 2004• By raising further equity in capital structure they
are able to reduce interest burden
Debt Restructuring process
• In 2002-03 Costly HUDCO debt reduced by 65%• Same time cheaper debt funds(from federal
Bank) Increased by 140%• Kurian also come to an agreement with HUDCO
to convert 520 Million worth of loan into equity it bought down Interest burden to 11% This help in reducing the Interest burden• In 2003-04 the reduced interest rates, growth in
revenues and operating profits makes it to cross Break even point
Strategic Issue Diagnosis
• Lack of ownership till kurian• Pessimistic view of bureaucrats• Financial viability business model• Land acquisition and related problems• Opposition from vested interests• Political inference• Funding for the New Airport
PEST ANALYSIS
Political Factors• On corruption front Kerala can rarely make a
difference• So the story of CIAL could have been the story
of other organizations in Public sector but the difference comes from strong leadership• Vested Interest Opposition to move domestic
Operations from old airport to new airport• Political interference in recruitment & Contracts• Significant role of political interference to change
the top management
Business & Operational climate(Social Factors)
• The states Business and Operational climate is Uncertain factors are• Public attitude• Labor issues• Political pressures• Undue social obligations
Economic Factors
• The project has begun post to LPG in India which makes it easier for attracting funds from Investors• The Kerala Economy which is more depends
upon the Tourism also gave a push to New airport construction
Management StyleManagement Style Kurian
Altruistic style Very High
Entrepreneurial style Very High
Pioneering Innovative style
Very High
Participative style High
Professional style Moderate
Organic style Moderate
Intuitive style Moderate
• Management Style – Situational based• Sensible way of handling the situations• Fall in the rational planning reference frame• Optimal utilization of resources – short hierarchy,
Emphasizing on Emphasis• Never resonated like a public sector organization
– passenger abuse, cameras• Neither stringent nor lenient towards employees
• Transformational leadership Qualities in Kurian• Kurian as the Organization builder• Systems, policies, procedures for effective
functioning post 2002• Two recognized labor unions• Transparency in operations
• Philanthropic – “Enough for me, now for the society.
Orphanage education, Monetary help from his own pockets.
•Strategic management skills of Kurian• Kurian Demonstrated leadership by mobilizing the
strengths of the enterprise and overcoming its weaknesses• Exercised personal skills to negotiate with, influence
and persuade stakeholders within and beyond the enterprise.• Established clear priorities and achieved desired
results, identifying and resolving significant issues continuously and proactively.• Kurian has become an origin of value – creating asset
with his reputation management skills and innovation skills.
•How Kurian Managed the strategic change and transformation?
• Pursued realistic growth ambitions• Non – compromising about his decisions and strategies• Having a mindset of not being change – averse and motivated employees
about the change.
• I reckon Kurian undertook BPR when he joined back organisation• I reckon that the insightful analysis of Kurian identifies his leadership role as
DESIGNER, TEACHER, STEWARD